In this paper, laminar forced convection and entropy generation in a counter flow microchannel heat exchanger (CFMCHE) with two different working fluids in hot and cold channels, i.e., pure water and Al2O3–water nanofluid are investigated numerically using a three-dimensional conjugate heat transfer model. The temperature distribution, effectiveness, pumping power and performance index for various volume fractions between 0.01–0.04, three nanoparticles diameters, i.e., 29, 38.4, and 47 nm and a range of Reynolds number from 120 to 480 are given and discussed. According to second law of thermodynamics and entropy generation rate in the CFMCHE, the analysis of optimal volume fraction, particles size, Reynolds number as well as optimal placement of using nanoparticles in hot/cold channels is carried out. It is found that decreasing particles size and increasing nanoparticles concentration lead to higher effectiveness and pumping power as well as lower temperature in the solid phase of CFMCHE. Furthermore, the frictional contribution of entropy increases with decreasing particles size and increasing volume fractions while the trends for heat transfer contribution of entropy are reverse. Total entropy decreases as particles size decreases and volume fraction increases hence the maximum performance occurred at lower particles sizes and higher volume fractions. The Reynolds number has significant effect on performance of system and with decreasing it the effectiveness increases and heat transfer contribution of entropy decreases while the pumping power and frictional contribution of entropy decrease. Finally, it is seen that the capability of heat transfer of Al2O3–water nanofluids is higher when they are under heating conditions because the effectiveness of CFMCHE is higher when nanoparticles are used in cold channels.

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